National Oilwell Varco Inc. (NOV): Today's Featured Basic Materials Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

National Oilwell Varco ( NOV) pushed the Basic Materials sector lower today making it today's featured Basic Materials laggard. The sector as a whole closed the day down 0.5%. By the end of trading, National Oilwell Varco fell $1.04 (-1.2%) to $82.76 on heavy volume. Throughout the day, 6.5 million shares of National Oilwell Varco exchanged hands as compared to its average daily volume of 3.6 million shares. The stock ranged in price between $80.65-$89.95 after having opened the day at $83.81 as compared to the previous trading day's close of $83.80. Other companies within the Basic Materials sector that declined today were: Pacific Ethanol ( PEIX), down 19.1%, BioFuel Energy Corporation ( BIOF), down 12.8%, HyperDynamics Corporation ( HDY), down 9.1%, and Goodrich Petroleum ( GDP), down 7.9%.
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National Oilwell Varco, Inc. designs, constructs, manufactures, and sells systems, components, and products for oil and gas drilling and production, as well as provides oilfield services and supplies, and supply chain integration services to the upstream oil and gas industry worldwide. National Oilwell Varco has a market cap of $36.17 billion and is part of the energy industry. The company has a P/E ratio of 15.6, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Shares are up 23.2% year to date as of the close of trading on Monday. Currently there are 19 analysts that rate National Oilwell Varco a buy, no analysts rate it a sell, and one rates it a hold.

TheStreet Ratings rates National Oilwell Varco as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

On the positive front, Geokinetics ( GOK), up 56.1%, Denison Mines Corporation ( DNN), up 18.6%, Northern Dynasty Minerals ( NAK), up 11.7%, and Atlatsa Resources ( ATL), up 9.1%, were all gainers within the basic materials sector with Gold Fields ( GFI) being today's featured basic materials sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the basic materials sector could consider Materials Select Sector SPDR ( XLB) while those bearish on the basic materials sector could consider ProShares Short Basic Materials Fd ( SBM).

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